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Bank of America cuts 1,200 mortgage jobs

A Bank of America branch in Washington, DC is pictured on August 7, 2013
A Bank of America branch in Washington, DC is pictured on August 7, 2013

Bank of America Thursday said it cut 1,200 employees in its mortgage finance division due to lower refinancing demand and a decline in mortgage delinquencies.

The US banking giant had 27,000 employees in its mortgage division at the end of the third quarter, or 32,000 including contract employees.

A bank statement said the cuts were taken after the number of delinquent loans fell to "less than one-third of peak levels."

As it responds to the lower demand, "we are reducing the size of the operations that support these specialized programs," the bank said.

"Additionally, in line with the industry, we are realigning our cost structure in response to lower customer demand for mortgage refinancing."

The cuts come on the heels of mortgage finance staff reductions at other big banks, including Wells Fargo and Citigroup, as fewer customers refinance mortgages due to higher interest rates.

The Wall Street Journal reported that Bank of America plans to eliminate 3,000 mortgage jobs in all in the fourth quarter.

Those figures appeared to include non-salary staff who were hired to work on mortgage issues, said a person familiar with the matter.

Bank of America and four other large banks hired thousands of people to address problems in their mortgage divisions following a $25 billion settlement with federal and state regulators in February 2012 over alleged foreclosure violations by the banks.